People Respond to Incentives (principle 4 _ microecons)
description
- Marginal changes in costs or benefits motivate people to respond
- Thatβs why they usually give a sale off or combo / added up benefits to motivate more sales
- Decision to choose option 1 over another = option 1βs marginal benefits > its marginal costs
- If the government wants to protect the environment, reduce carbon footprint
- Reduce taxes for electric vehicles
- More taxes / higher prices for private vehicles, lower prices for public vehicles
- Build an elevated railway to promote traveling in mass to save energy